BMW-Peugeot alliance on shaky ground

Comment on this story


BMW

.

BMW wants out of a joint venture with Peugeot after the French firm signed a deal with GM.

BMW is reconsidering a joint venture with PSA Peugeot Citroen to make hybrid vehicles in light of a deal between Peugeot and US giant GM.

A BMW spokeswoman said: “The alliance between PSA and GM has changed the joint venture's conditions.”

She said that talks between BMW and Peugeot “might result in a change in shareholders” in the venture known as BMW Peugeot Citroen Electrification, which is currently evenly divided between the two companies.

“Something has to change.”

A PSA spokesman confirmed: “PSA and BMW are examining the implications of the alliance with GM regarding the BPCE joint venture.”

The French financial daily La Tribune said in a report on its website that BMW might take a majority stake in the venture, or possibly even become the sole owner.

A BMW spokesman insisted: “We will pursue the business, regardless of the changes at PSA.”

General Motors agreed in February to buy a seven percent holding in PSA for about $420 million (R3.5 billion) and the two companies are expected to build a broad alliance to reduce logistics, purchasing and development costs.

PREVIOUS ALLIANCE

Meanwhile, PSA and BMW have invested €100 million (R1.05 billion) in BPCE which, like BMW, is based in Munich, southern Germany, thus expanding on a previous alliance they had set up to develop small petrol engines.

German auto expert Stephan Bratzel commented: “BMW was surprised when PSA launched its cooperative arrangement with GM.”

He said the German car maker “is worried that know-how developed by the joint venture could fall into the hands of its rival GM”.

The auto sector has become the setting of multiple alliances because car makers must share costs for new technology to meet stricter global emission standards.

In March, BMW agreed to work with Japanese giant Toyota on the development of lithium-ion battery cells to power more environmentally friendly cars. - AFP

Motoring newsletter - click here to keep up to speed with the best in motoring


sign up
 
 

Comment Guidelines



  1. Please read our comment guidelines.
  2. Login and register, if you haven’ t already.
  3. Write your comment in the block below and click (Post As)
  4. Has a comment offended you? Hover your mouse over the comment and wait until a small triangle appears on the right-hand side. Click triangle () and select "Flag as inappropriate". Our moderators will take action if need be.

     

Join us on

IOL-Social networks IOL-Social networks IOL-Social networks IOL-Social networks

Business Directory